Speeding up disbursement of ODA projects

Deputy Prime Minister Hoang Trung Hai, who is head of the National Steering Committee for ODA and Preferential Loans, said that currently there are too many redundant administrative procedures which slow down the process and hamper the distribution of ODA funds.

Deputy Prime Minister Hoang Trung Hai chaired the March 29 conference

He believes that the steering committee and the six ODA development banks (Asian Development Bank, World Bank, JICA, Korea Eximbank, KfW-Germany and AFD-France) need to work directly with each other to improve coordination which will result in more rapid distribution of the funds into the projects.

The Committee reported that in 2013, Vietnam attracted US$5,137 million of ODA, including US$4,686 million from preferential loans, and US$451 million in non-refundable aid), representing a year-on-year increase of 23%.

A high ratio of funding from big donors was disbursed effectively in 2013  with US$ 1,686 million from the Japan International Cooperation Agency (JICA) and US$1,359 million from the World Bank (WB).

In addition, the Asia Development Bank (ADB) level of disbursed ODA exceeded US$1,300 million, the largest it has ever recorded.

Major hurdles for ODA project implementation

Participants at the conference expressed concerns that even though distribution of ODA funds is on the rise, yet more effective disbursement of them could be achieved with better oversight and management of the projects.

They pointed out shortcomings in feasible study reports and consultation work, especially on matters related to technical issues that impede implementation and  retard the disbursement of  investment capital.

Improvements are also need in  expediting site clearance on transport and urban development projects, they said, adding that too much time is wasted clearing the sites and addressing resettlement issues which delay investment in the projects.

The attendees also criticized some bidders and project managers of several transport projects for their lack of quality management and failure to keep the projects on schedule.

Practical measures

Deputy Minister of Planning and Investment Nguyen Chi Dung proposed a package of five key measures to boost the disbursement of ODA funding as follows:

First, administrative reforms, supplements and amendments to a number of existing laws relating to ODA, such as the construction law, the bidding law, and the law on public investment need to be made.

Special attention needs to be paid to completing procedures required by donors, including those on site clearance, resettlement, bidding, financial management, and auditing.

Second, State management agencies need to beef up their exercise of management and oversight of ODA-funded programmes and projects to promptly identify problems and dealt with them effectively before they cause unnecessary delays in the progress of the work on the project and in turn a disbursement of ODA funds.

Third, the National Steering Committee for ODA and Preferential Loans should work hand in hand with the six development banks and, for example, organize regularly scheduled quarterly conferences to review and evaluate the implementation of ODA projects.

Fourth, the responsibilities of project managers and officers on projects needs to be clearly delineated along with clear dispute resolution procedures so that tighter control of the project management construction schedule can be exercised directly by the project manager directly.

Last but not least, it is important to improve the project selection process to ensure that on a cost benefit analysis the selected ODA-funded programmes and projects are the best for the nation and are effectively implemented on schedule, thus pushing up socio-economic development and improving people’ living standards.